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The Contractor Agreement (Individual) allows you to hire a contractor that is an individual (ie. not a registered company). The Contractor Agreement also sets out the important legal terms, such as clauses on IP, confidentiality, warranties and Indemnities and more. Utilising independent contractors is a very effective avenue for business' and companies that want to tap into specialised individuals that might not otherwise be available or affordable.
Use this Contractor Agreement (Individual) if:
- You are engaging the services of someone as an Individual Contractor instead of an employee of the company;
- You want to ensure that the company owns any intellectual property that is developed by the contractor for the company; and
- You are looking to eliminate any confusion about each party’s rights and obligations.
What does the Contractor Agreement (Individual) cover?
- The nature of the services to be performed;
- Payment and expenses;
- Intellectual property; and
- Relevant warranties and indemnities.
Other names for Contractor Agreement (Individual) include:
- Independent Contractor Agreement.
What’s the difference Between a Contractor Agreement and:
An Employment Agreement
Employment agreements are an agreement between an employee and employers, and often include scope of work, hours of work and salary. They are generally shorter in length in comparison to other agreements. Sometimes, employment contracts include a Restraint of Trade clause that attempts to restrict an employee’s conduct once they leave the company.
A Services Agreement
Service Agreement is commonly used between two parties, one who will provide the service and the principle, who pays for the service. Often these agreements involve key dates, rights and obligations, payment, IP rights, termination, non-solicitation and liability and waivers.
A Non-Disclosure Agreement (NDA) is a legal document that restricts the other signing party from disclosing confidential information to another person or entity. This is the case with a one-way NDA. This document is enforceable if signed by both parties. If an NDA is required to protect intellectual property and information of both parties, then a Mutual NDA will be required.
Tips for Completing Your Contractor Agreement
When hiring a contractor, it is important that all essential legal terms are included, to ensure that your business’ IP is not exposed and to ensure that the rights of the contractor working for you are maintained.
Common legal terms to include in your Contractor Agreement are:
- The parties: this includes the names of the parties involved as well as the relevant business information.
- Description of the services or results: Essentially, the work to be done.
- Payment: Including the manner and timing.
- Intellectual property: Most notably, the work created by the contractor will often be considered your business’s IP, as per their Contractor Agreement.
- Confidential Information: This protects your company’s information, such as the business’ IP.
- Indemnity: This often involves outlining any compensation for potential loss.
- Insurance: This involves the insurance obligations of both parties.
- Subcontracting: This entails whether it is possible for the contractor to sub-contract the work, or whether there are prohibited from doing so.
- Exclusivity arrangement: This limits the ability of the contractor to work with other clients during the period they are working for you.
Why Do Companies Hire Contractors?
Commonly, hiring a contractor is ideal when businesses need to complete short- term work. Often this work is specialised and requires the expertise and specific equipment that the contractor possesses. Utilising contractors is often a more cost effective manner in hiring specialised individuals, who would otherwise have been unavailable or unaffordable for businesses.
What Are Common Services Hired as a Contractor
A few services for which contractors are hired for include:
- Construction work
- Writing and drafting content for a company, which are often commonly known as freelancers
- Photography and filming
- Web developing
5 Tips When Hiring a Contractor
Important points to consider when hiring a contractor:
- Does the work you require involve the need for a contractor? Or rather, should they work as an employer? It is best to take numerous factors into consideration such as whether the work will only be required for a short period of time.
- When considering the person for the job, be sure to interview carefully. This can involve video conferencing to make sure that the contractor is skilled for the job and best suited to work with your business.
- Look at what other clients have said about the work that the contractor has done in the past. Do they have good reviews from previous clients?
- Obtain or create, with the assistance of a legal professional, a Contractor Agreement. Ensure that it includes essential legal terms of the nature of the work to be completed, insurance, termination, payment and confidentiality, just to name a few. Ensure that both parties adequately understand and sign this Contractors Agreement.
- Ensure that you establish a platform through which you can keep track of the contractor’s hours and how much they are costing you, in addition to briefly noting the work they are completing.
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